Technology offers ad-free TV

Advertisers testing new ways to get products before consumers

With the spread of new television technology, soon you’ll be able to skip commercials almost completely.

Personal video recorders (PVRs) — better known under brand names such as TiVo and ReplayTV — are currently in about 2 million American households and the number is quickly rising, said Bill Niemeyer, an industry analyst and founder of Centrimedia, a TV technology information company.

PVRs offer the ability to pause and record live broadcasts so that shows can be watched at the viewer’s convenience. But PVR manufacturers are taking the technology further, developing new versions that allow viewers to automatically skip the commercials in their recorded programs.

“The technology is being totally revamped,” said Joe Boyle, vice president of corporate communications for the cable service iN DEMAND. “There’s equipment now that will let you skip commercials. Your programs can be advertiser-free.”

You may not even have to buy a PVR unit in order to skip commercials. Satellite TV companies such as EchoStar are developing ways to inject these capabilities into their service.

“The way we get TV is undergoing a fundamental change,” said Ron Fellman, the chief technology officer at Path 1 Network Technologies. “People are going to watch what they want to watch, when they want to watch it, whether or not that is convenient for broadcasters.”

Advertisers seek options

PVR technology, analysts agree, may very well revolutionize the techniques used by companies to advertise. One direction that some advertisers may try involves “advertainment,” said Niemeyer.

Advertainment describes separate, short programs on a sponsored event or specialized broadcast that a company has sponsored. Viewers must choose to select and watch.

Although this style of advertising is still being tested, there has been some positive response. Volvo recently ran a 10-minute spot highlighting the sponsored Volvo Ocean Race, followed by a short plug on its newest car model. Surprisingly, Niemeyer said, people looked at it.

“These things are not interrupting the viewing experience,” he said. “They are the viewing experience.”

On the other hand, advertisers might not have the time or resources to develop their own material, said Ed Graczyk, director of marketing communications for Microsoft TV. Graczyk suggested that companies might simply sponsor shows that are already running, much as businesses did when television was in its early stages.

More likely, he said, is that product placement in television will become the norm. Already, the WB network has announced that a new reality series will be shown commercial-free and rely totally on product placement. But the future of product placement doesn’t stop at lingering camera shots on merchandise.

PVRs and similar interactive television technology will allow viewers to click on items on the screen that they are interested in — for example, a sweater that Jennifer Aniston wore on “Friends.” Viewers would then have the option to visit the clothing line Web site, Graczyk said.

“If people will skip through the ads, then companies will just find a way to circumvent people skipping through,” Graczyk said, noting that testing in Europe has allowed viewers to click on players during sporting events for stats, or order a pizza by clicking on the ad on the screen. “Not only that, it’s the ultimate platform for impulse buying,” he said.

Battle brewing

Some forward-thinking businesses are already planning advertising strategies. Still, the entertainment industry generally does not react well to new technologies that tamper with their control over the medium. Music sharing and Napster come to mind. As the public finds itself with more and more capabilities to personalize their entertainment, some companies are less willing to adapt and more willing to litigate.

“There are a lot of issues that have to be solved with what PVRs can do,” said Seth Haberman, CEO of Visible World, a media service provider. “The major studios are joining together to fight it. The legal battles have just begun, and they’ll be going on for years.”

The technology may be available faster than we realize. Niemeyer predicts that the price of PVRs will fall to less than $200 by Christmas, making it the “gift of the season.”

So, even though less than 2 percent of American television owners currently own PVRs, their spread is inevitable.